No matter what the British thought, the Vienna Conference proceeded as scheduled. Unsurprisingly, Britain, France, and Austria all became mediating powers. As the delegations arrived, Vienna grew even more lively. The Prussian and Russian representatives were like busy little bees, flying between embassies, generating fresh headlines every day that kept onlookers eagerly entertained. The British supported the Prussian government, while the French were hesitant and reluctantly siding with the Prussian-Polish Federation, though their support was limited. Austria, as the host nation, had yet to take a clear stance, making it the primary target of both sides. Whichever party secured the Austrian government’s support would gain a significant advantage in the negotiations. Setting aside the worthless negotiation minutes, Franz asked, “Have we roughly figured out the bottom lines of Prussia and Russia?” At some point, diplomatic negotiations had turned into a game of exaggerated demands. everyone had learned to ask for the moon at the start, with no regard for feasibility. Take the Russians, for example. They were demanding that the Prussian government cede East Prussia, Pomerania, Poznań, and the duchies of Schleswig and Holstein, along with war reparations totaling approximately 960 million guilders. Among these demands, the Duchies of Schleswig and Holstein were to be returned to the Danes. Although it was unclear whether Russia had any agreements with Denmark, Franz knew that this was all about money. The end of the war did not mean the end of troubles for the Russian government. On the contrary, their real problems were just beginning. In the years to come, the Russians would have to embark on a long and arduous journey of debt repayment. By this point in the war, Russia had already accumulated an enormous debt. Austria alone was owed a staggering 670 million guilders. Currently, Russia had to pay Austria nearly 4 million guilders in monthly interest and principal payments, a commitment that would last for decades. By the time the debt was fully repaid, the total amount, including interest, would exceed 1.4 billion guilders. The Russian government’s annual fiscal revenue was only around 100 million guilders, meaning nearly half of it would go toward servicing Austrian debt alone which was something the Russian treasury clearly could not sustain. From what Franz knew, beyond Austria, the Russian government also owed at least 200 million guilders to other countries, primarily the Nordic Federation and the United States. The loan from the Nordic Federation had been secured using Finland as collateral, while the debt from the United States was one of the Russian government’s few diplomatic successes. There was no other way. Humans fear loneliness, and nations, being made up of people, inherit this trait as well. It was hardly surprising that two nations isolated by the world would choose to stick together. During the American Civil War, the Russian government had supported the North, and now it was time to collect on that favor. It wasn’t that the Americans were particularly loyal. Rather, they had no other choice. Under pressure from Britain, France, Austria, and Spain, the United States had been isolated by Europe. With most European nations keeping their distance, they had no better ally than Russia, another state shunned by the great powers. Even though the post-split United States was no longer as wealthy as in the original timeline, it still helped Russia sell tens of millions in war bonds. And that was just the foreign debt. Beyond this, the Russian government had also accumulated massive domestic debt, though Franz had no way of knowing the exact figures. It was certainly an astronomical sum. On top of that, war pensions for wounded soldiers, the resettlement of retiring troops, and the economic reconstruction of war-torn regions would require yet another huge expenditure. In this regard, the Russian government was no better off than the Prussian government with both teetering on the edge of bankruptcy. Times had changed. This time, most of the debt was secured with territorial collateral, meaning that failure to repay would lead to land concessions. Financial bankruptcy was no longer a viable escape route. Setting other regions aside, Finland was absolutely indispensable. Losing it would directly compromise the strategic security of St. Petersburg. From an economic standpoint, the Duchies of Schleswig and Holstein were far more valuable than the frozen wastelands of Finland. Using these duchies to repay debts might even bring in some extra cash. Strengthening Denmark in the process could also complicate internal relations within the Nordic Federation, reducing potential threats from the north. Franz understood the Russian government’s desperation to escape its financial crisis, but their proposed terms were completely unacceptable. Regardless of whether Germany remained divided, the key issue was that the Prussian government was completely broke. After being carved up like this, they would have nothing left to pay war reparations. Russia’s demands were excessive but at least understandable. As the victors, they were expected to make high demands. However, the Prussian government’s proposals were so unreasonable that Franz took one glance at them and didn’t even bother reading further. The first demand was for the immediate withdrawal of Russian troops from the Prussian-Polish Federation’s territory. Nothing else even mattered as this alone was non-negotiable. Foreign Minister Wessenberg replied, “Preliminary assessments suggest that Russia’s main objectives are territorial concessions and war reparations. Aside from reclaiming their original territories, they also want to keep East Prussia and Poznań, which they have already occupied. That part isn’t a major issue. The real problem is the war reparations. The Russian government is truly out of money and is looking to seize this opportunity to fill its financial gap. Judging by the current situation, if the Prussian government can pay enough in reparations, the Russians might be willing to forgo territorial demands. Prussia’s position is more complicated. The Prussian government cannot afford to pay war reparations but still wants to keep East Prussia, offering only Poznań as a concession.” After thinking for a moment, Franz laughed and said, “The situation is better than we expected. A cash-strapped Russian government is the best version of itself, because otherwise, they might have swallowed Prussia whole. The Prussian government’s wishes don’t matter much at this stage. As the defeated party, they have little room for negotiation. The territories already taken by the Russians are gone for good, and expecting them to be returned is unrealistic. Both Prussia and Russia are struggling financially. Every additional day of war costs them hundreds of thousands of guilders in military expenses, and they simply cannot afford to keep going. For now, we should avoid interfering too much. The negotiations have just begun, and the Prussian and Russian representatives probably haven’t fully settled into their roles. Letting them cool down first would be wise. However, we can privately meet with the Prussian delegation and suggest they repay their debts to various nations with material goods. I doubt anyone would refuse that offer.” Repayment in kind was a major trap. Prussia did not have an abundance of natural resources, so the only viable material goods it could offer were industrial and manufactured products. Franz understood just how dangerous this could be. In the original timeline, when World War II broke out, the industrial capacity of Nazi Germany had surpassed that of Britain and France combined. Before World War I, the German Empire accounted for 14.8% of global industrial output, while the British Empire held 13.6%, making the two countries nearly equal. Combined, Britain and France far outproduced Germany. During World War II, the situation changed. In the early years, Germany accounted for 13.2% of global industrial output, while Britain’s share had dropped to 9% and France’s had fallen to a mere 4.5%. After annexing Austria and Czechoslovakia, Germany’s industrial output surpassed the combined total of Britain and France. (Author’s Note: These figures are for reference only, as different sources provide varying estimates.) Judging purely by industrial data, Britain and France looked more like the defeated powers. Germany’s share of global industrial output had declined because Alsace-Lorraine, rich in coal and iron, was returned to France, and Silesia, a major textile hub, was ceded to the newly independent Poland. The main reason for this shift was repayment in kind. To cover war reparations, Germany had to hand over massive amounts of industrial and commercial goods every year. Capitalists soon realized that reselling German goods was more profitable than producing their own. Naturally, profit came first. Before long, both the British and French home markets, along with their colonies, were flooded with German-made products. The markets that Germany had failed to conquer on the battlefield were handed to them through war reparations. Sometimes, the way the world works is simply absurd. Talking nonsense was one thing, but Franz was very much looking forward to this scene unfolding. “Yes, Your Majesty!” replied Foreign Minister Wessenberg. … Prime Minister Felix stated, “The British have been very active lately, spreading propaganda everywhere about the benefits of establishing a North German state, completely disregarding us. The impact has been extremely negative. Especially in the Kingdom of Hanover, many newspapers are advocating for North German nationalism. Using religious beliefs as a pretext, they are stirring up public sentiment and attempting to divide the empire....” What is meant to come will come. The establishment of a North German Empire is far too significant a matter to be decided by a few high-ranking officials on a whim. Without public support, the North German Empire would be no different from the current ‘Comedy Empire.’ A country in name only, where the central government has no real authority. If the political structure remains as loose as it is now, calling it an empire would be misleading. It would be more accurate to describe it as a confederation of states. This was not what the British wanted, and it was certainly not what George I wanted. If the people’s cohesion could not be strengthened, then the only value of this empire would be to serve as a buffer zone for the great powers. Franz thought for a moment and said, “We can create some minor troubles for them, but we must be careful with the intensity. We do not want to scare them. It would be best if we could draw everyone out so we can filter out who is our friend and who is our enemy. The British want a North German Empire. Then let’s give them one, but it must be a North German Empire that meets our requirements. The Kingdom of Prussia is a useful chess piece. No matter how much they are weakened, they will still be stronger than Hanover. A weak center and strong local powers have always been a recipe for disaster throughout history. Once the post-war decline period is over, the restless Junker nobles will undoubtedly push the Prussian government to challenge Hanover. By then, things will get interesting. Perhaps we will not even have to wait that long. Right now, the Kingdom of Prussia is in desperate need of money to survive. I do not believe that when it comes time to pay up, these enthusiastic activists will still be eager to establish a North German Empire.” Deep down, Franz had already made up his mind. He would have the Russians impose an exorbitant war indemnity on the Kingdom of Prussia. Whether Prussia could afford to pay it back did not matter. If necessary, the repayment period could be extended to a hundred years, or even two hundred if needed. When the time was right, the debts weighing on the Prussian government could be transferred to the North German central government instead. There was already a precedent for this. After the establishment of the Prussian-Polish Federation, the Prussian government sought full integration by unifying military and administrative affairs. As a result, the debts of the Polish government fell onto the central government. In theory, now that the Kingdom of Poland had fallen, the Prussian government had an opportunity to refuse to honor Poland’s previous debts, shifting the burden onto the Russians who had occupied Poland. However, this was a world where the strong preyed on the weak. The will of the great powers was international law. Since the creditors lacked the power to force the Russians to pay, they could only pressure the weaker Prussian government. With no leverage to refuse, Prussian had no choice but to continue repaying these debts. A similar strategy could be applied to the North German Empire. No matter how many promises the British made, a simple debt transfer would be enough to make their allied states jump ships. If the problem could be solved at its root, there was no need to rush. The best strategy was to use this opportunity to drain John Bull’s excess energy, preventing them from secretly scheming behind the scenes. Foreign Minister Wessenberg spoke with concern, “Your Majesty, the situation may not necessarily develop according to our wishes. Based on the current circumstances, the Kingdom of Prussia will undoubtedly carry out massive military reductions after the war. The war has dealt a severe blow to the Junker nobility. More than a thousand noble officers have perished on the battlefield, and over three hundred aristocratic families are now facing the risk of dying out due to the war. With such heavy losses among the younger generation, the Junker nobles will face a succession crisis once the older generation retires. Their control over the state will inevitably weaken. Perhaps we will not even need to wait for the future. This war itself is an opportunity. Someone must take responsibility for a defeat. If Wilhelm I announces his abdication after the war, the high-ranking Junker nobles will have no choice but to step down as well. The timing will be too tight for them to train successors. The positions they leave behind will be filled by their deputies or subordinates. After this political reshuffle, the Junker nobles will lose control over the government. The new administration will most likely take further measures to weaken their influence. For example, using financial pressure as an excuse, they may drastically reduce the size of the military, putting an end to the distorted political structure where the army owns the state instead of the other way around.” It is not just a possibility, it is something that will inevitably happen. Political struggles are ruthless. If Wilhelm I does not take advantage of this opportunity, then he is not truly Wilhelm I. Wilhelm I is already over eighty years old and does not have many years left. The blow of military defeat has severely affected his health. Given the chance to remove his political opponents and eliminate obstacles to his descendants’ rule, there is no reason for him to refuse. Moreover, this is an open and undisguised strategy. It is not the emperor forcing everyone to resign but rather the nobles’ own sense of honor that makes them unwilling to remain in high positions. Due to the war, most of the Junker nobility’s core members are in the military. Those remaining in the government, aside from a few high-ranking officials, are mostly not military Junkers. After this political reshuffle, the military will lose control over the government. No matter who takes power, they will not give the Junkers a second chance to dominate the administration. A similar scenario played out in the original timeline. After World War I, the influence of the Junker nobility was significantly weakened. Following continuous suppression, they were eventually sidelined during World War II when “Hi***” even stripped them of control over the military. … A Prussia controlled by politicians and a Prussia controlled by the military are entirely different concepts. The former has an even lower bottom line. Unlike “militarism,” which habitually resorts to force, politicians prefer compromise. This inevitably introduces uncertainty, as no one can guarantee that the Prussian government will not reach a settlement with Hanover. Franz nodded and said, “This is indeed a problem. However, the interests involved are too significant. Even if both sides do compromise, it will not be something that can be accomplished in the short term. The Ministry of Foreign Affairs should keep a close watch on them. If necessary, we can take extraordinary measures.” To be frank, Franz was not particularly worried. Achieving such an outcome would require not only exceptional political maneuvering but also a favorable international environment.
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